The European Commission has today launched plans for the biggest reform of EU VAT rules in a quarter of a century.
Overall, over €150 billion of VAT is lost every year, meaning that EU countries miss out on revenue which could be used for schools, roads and healthcare.
Of this, around €50 billion - or €100 per EU citizen each year - is estimated to be due to cross-border VAT fraud, which can be used to finance criminal organisations, including terrorism.
It is estimated that this sum would be reduced by 80% thanks to the proposed reform.
The proposed VAT reform would also make the system more modern, robust and simpler to use for companies and businesses alike.
The proposals include a series of fundamental principles, or 'cornerstones' of a new definitive single EU VAT area. It also introduces the notion of a Certified Taxable Person and four 'Quick Fixes' to come into force by 2019.